May 13, 2013;

The importance and value of corporate citizenship is not a new idea, but it always worth a reminder. Sid Espinosa, the former mayor of Palo Alto and Microsoft’s Director of Corporate Citizenship, recently posted an article that’s a thoughtful approach for corporations that are looking at getting involved. The fact that it comes from someone with experience in the public and private sector gives it an extra punch and his experience in the nonprofit and philanthropic sector enriches that.

While he remonstrates that profits should not be the reason for engagement in community, Espinosa reminds corporations that their bottom lines are likely to be affected positively when they have developed a positive reputation through engaging with and investing in community. He cites a study from the Reputation Institute which demonstrates that involvement in the community is one of the most powerful ways to build a positive reputation. He cites a statistic that a 10 percent increase in corporate citizenship can lead to a 14 percent increase in a company’s market value. However, the article suggests that companies should not get involved just to improve the bottom line, but because the company is part of a community, and so has an obligation to help that community. Social problems are best solved by a cross-community partnership, with corporations needing to see themselves as part of that partnership.

The recommendations in the article include adopting a cause that is related to the business of the company; a technology company might want to get involved in science education, for example. This means that the work of the company is directly related to the cause—it’s a mission match, and the connection can run deeper than a donation. “Help with product gifts, volunteerism, employee giving, event hosting, and visibility opportunities (to name a few) to ensure that yours is a fruitful partnership,” Espinosa recommends.

He also cautions that in terms of reputation, it is not all about the corporation; a nonprofit can be hurt badly by the wrong partnership. NPQ has discussed this previously in a number of articles. Importantly, he says this all has to start at the top, with the executive modeling the behavior. And talking about modeling and being true to one’s corporate culture, Microsoft yesterday sponsored a “geek fashion show” with 100% of proceeds will benefit the Network for Teaching Entrepreneurship.—Rob Meiksins